Carolyn Callahan hears the grumbling as faculty colleagues gather 'round the coffee pot at the University of Virginia's Ruffner Hall.

Why, the professors muse, does the Curry School of Education endure crammed and obsolete working conditions, while just a short walk away, the university's football team competes in an expanded, state-of-the-art stadium?

"We're in a building that's incredibly overcrowded, and has been for 15 years," Callahan says. "I have graduate students sitting on top of one another. It makes me clench my fist not at the athletic department, but at society's values.

"I'm not angry at the athletic department. I'm not angry at those who want the best for our athletes. What angers me is the arms race."

The race: Build the grandest stadiums, arenas and support structures.

The goal: Win more games and generate desperately needed revenue.

The conflict: While athletic departments spend millions to upgrade, academic departments chafe at budget constraints and brace for outright cuts.

Virginia and Virginia Tech, the commonwealth's flagship universities, are committed to the arms race. From stadium expansion to arena construction, they plan to spend more than a quarter-billion private dollars upgrading sports facilities.

These improvements represent the schools' only chance of winning championships and balancing the athletic department books, officials say. Posh basketball arenas and football stadiums, they contend, attract better athletes and more fans, generating the ticket revenue and broadcast fees necessary to fund teams in sports such as softball and soccer.

"Virginia and Virginia Tech are competing on the national scene," Tech athletic director Jim Weaver says. "When you compete on the national scene, you have to do what's necessary ... or you're wasting money."

"It is totally irrational, particularly at a time of recession," says Murray Sperber, author of "Beer and Circus: How Big-Time College Sports Is Crippling Undergraduate Education."

"I think there will be a day of reckoning when the red ink really flows."

Builders' bonanza

Virginia and Virginia Tech don't believe it, witness these projects:

A $37 million expansion of the south end zone at Tech's Lane Stadium. The project, scheduled for completion next year, includes 15 luxury suites, 1,200 club seats and two palatial locker rooms.

Plans for a $48-million, west-side renovation at Lane that would add 18-20 suites and 1,026 indoor club seats, increasing capacity from today's 51,220 to approximately 68,000. The upgrade could be finished by 2004.

Plans for a $125-million basketball arena at Virginia. With two $20-million gifts pledged, officials anticipate a 2006 opening.

Tech and Virginia are not alone. Within the state, the basketball teams at Christopher Newport and Virginia Commonwealth compete in new arenas. Hampton University boasts a renovated football stadium, and Old Dominion plans to dedicate its new arena in 2002.

During the last five years, universities nationwide have embarked on $4 billion worth of stadium and arena projects, according to the Knight Commission, a watchdog group monitoring college sports.

Ohio State spent nearly $300 million, including $15 million from taxpayers, to expand its football stadium and build a basketball arena. The University of Maryland received $58 million in state funds to construct the Comcast Center, a $101-million arena scheduled to open next basketball season.

Those price tags make the $34 million the University of North Carolina spent for the Dean E. Smith Center in 1985 look like petty cash. Such are the costs of the well-appointed suites and private concourses that allow wealthy donors to view their football and basketball while dining on salmon mousse and French wine.

"It's incredible," says Tom Gabbard, an associate athletic director at Virginia Tech. "We're going as hard as we can just to catch up. If you want to see a Hall of Fame, go to North Carolina. Look at the University of Florida. They have 84,000 people in their stadium, and they're adding more seating.

"Arms race is a good way to put it. If you want to see a football locker room, go to the University of Texas. You're going to swear you're in the most expensive executive club in America. Mahogany, hand-rubbed, unbelievable lighting. Ours is nice, until you go there."

'F' for facilities

Such extravagance receives mixed reviews from academics.

In a June report entitled "A Call To Action: Reconnecting College Sports and Higher Education," the Knight Commission called the arms race evidence "of the widening chasm between higher education's ideals and big-time college sports."

Faculty senates at eight of 10 universities in the Pacific 10 Conference passed resolutions this spring denouncing excessive spending on athletics. The groundswell began at Oregon, which is spending $80 million to expand its football stadium.

At Virginia, "there's a sense among faculty that when you ask a donor for money for the stadium, that's money they would have given to the English department," says Callahan, the faculty liaison to the athletics department.

"It's too bad we can't get those funds for the university's educational structures," says William Latham, a member of Virginia Tech's Board of Visitors. "But we have to say, and it's true, that the people who generally give to bricks and mortar in athletics would not give, at least in those amounts, to the academic interests of the university.

"When I say that, it's not being critical. That's just their interests."

The balancing act

Balancing academic and athletic concerns falls to each institution's Board of Visitors. The boards must approve all athletics capital projects, private funding notwithstanding.

Latham, who serves on the Tech board's building and grounds committee, says the board typically downsizes proposals from athletics.

"There's a tremendous desire on the part of those in athletic administration to take advantage of the support that is created by nationally recognized teams," Latham says. "It's the obligation of the institutional executives to look at that very, very closely. And we do."

John Ackerley III, rector of Virginia's Board of Visitors, believes academic and athletic concerns are compatible. He cited the board's October approval of $126.7 million in academic construction, scheduled for completion by 2007.

"In my research, I've found that spending on athletics facilities enhances the reputation and quality of the entire academic experience," says Robert McCormick, an economics professor at Clemson. "Instead of enemies, I find academics and athletics to be allies. But that doesn't mean we wouldn't be better off spending the money on something else."

In Virginia, that money is private. State law prohibits public funding of college athletics, and all department revenue comes from ticket sales, television rights, student fees, individual gifts and corporate donations.

Sperber, an English professor at Indiana University, counters that all college athletic departments spend public money, in the form of student fees and university loans. Only "the naïve and totally stupid" believe otherwise, Sperber says. "The academic side does pay for college sports. I know they deny it. But it's true."

Faculty members aren't the only ones asking questions. As football stadiums and basketball arenas expand, coaches of non-revenue teams see their operating budgets and scholarship allotments cut or frozen.

At Virginia earlier this year, a committee recommended eliminating scholarships for some sports and slashing grants for others.

"When you build suites and things like that, the other coaches say, 'What are you guys doing?' " says Terry Holland, the lead fundraiser for Virginia's arena. "We tell them, 'We're investing to keep from having to spend more of your money.' "

On the rise

Spend money to make money: Athletic departments bank on the theory. So even with budgets stretched by legal obligations to women's teams and rising operating costs, the construction boom continues.

Revenue from suite leases (the average suite costs $40,000-$50,000 per year) and increased ticket sales, and interest earned from private donations, should more than pay the annual debt service on stadiums and arenas. Or so the theory goes.

Professional sports owners thrive under a similar model. Of the NFL's six most profitable franchises in 1999, five played in suite-laden stadiums built since 1995. Of the six least profitable, all played in stadiums built before 1977.

College athletic directors noticed the trend years ago, according to Scott Radecic of HOK, an architectural firm specializing in sports stadiums and arenas. Subsequent business prompted HOK to more than double its college division, to 40-some employees.

Southeastern Conference schools "started to incorporate some of the features and amenities that we had been designing for professional facilities," Radecic says. "Some schools needed increased capacity and expanded venues for unmet ticket demands, and with some, even though they may not have needed additional seats, there was a component of avid supporters willing to pay for more amenities and luxuries."

Virginia supporters are willing to pay. They leased 41 of 44 suites at Scott Stadium last season, 53 of 56 this year. Football season ticket sales have increased more than 30 percent since 1995, from 24,165 to 32,000

"I won't say 'build it and they will come,' but the stadium is kind of selling itself," says Dick Mathias, Virginia's ticket manager since 1985.

Virginia Tech forecasts similar demand, especially given the football program's recent national ascent. Season ticket sales have more than doubled since 1995, from 14,124 to 30,254.

"Lane Stadium expansion wasn't part of the arms race," Weaver says. "It was to care for the demand we thought we were going to have for Virginia Tech football. ... The suites and the club seats, yes they're amenities for our fans, but they also provide funding mechanisms to pay for it that you wouldn't have if you just put up planks for bleachers."

Since the federal government grants college athletic departments non-profit status, the suites and club seats also provide significant tax relief for their occupants. The IRS permits suite holders to deduct 80 percent of their lease costs, minus the value of the game tickets they receive in exchange for leasing the suite.

Translation: An individual or corporation that leases a suite for $50,000 can deduct approximately $35,000.

"It gives us a huge leg up competing with the pros," Holland says of the tax laws.

Club seats and suites, according to Holland, "provide a lot more revenue, which keeps you from having to get too big, so you don't have empty seats."

Virginia Tech's Gabbard calls Hokies fans "terrifically loyal" but says an expanded Lane Stadium "will be an interesting test. You go 11-0 one year, 10-1 last year. But when it's all over, what happens when you go 3-8?"

Penn State may soon find out. This season the Nittany Lions debuted a $93-million stadium enhancement that added a locker room, 12,000 club seats and 60 suites, expanding capacity to 106,537. This follows a $13.8-million football support center that opened in 1999.

Meanwhile, the team struggles, enduring consecutive losing seasons for the first time since 1931-32. Attendance has yet to drop, but how long will the faithful trek to remote Happy Valley to watch a sub-standard product?

At Notre Dame, the answer is indefinitely. The school spent $50 million to add 21,000 football seats in 1997, and despite an eight-year absence from championship contention, home games continue to sell out.

Other programs have reaped dividends immediately following upgrades. Prior to opening the Breslin Center in 1989, Michigan State's basketball team qualified for six NCAA Tournaments in 50 years. Since, the Spartans have made nine NCAA appearances and advanced to three consecutive Final Fours, winning the 2000 national championship.

Prior to expanding its stadium in 1991, Florida had never earned an SEC football championship. Since, the Gators have won eight. Still, that's not enough for the 1996 national champions. The Gators plan to add 2,900 club seats and 28 suites for the 2003 season.

Virginia Tech's financial model reflects as much. Projecting the fiscal soundness of stadium expansion, school officials assumed sales of 85 percent of club seats, 65 percent of new general admission seats, and 13 of the 15 suites.

"We certainly hope we sell out every game," says Dwight Shelton, the school's vice president for finance. "But we didn't want to bank our plan on that."

Virginia Tech's payment plan for the $37-million south end zone expansion: $11 million in private donations and $26 million in state-issued bonds, which mature in 25 years.

Shelton estimates Tech's annual debt service at $1.9 million. He says additional ticket revenue will more than cover the debt and that no student fees are earmarked for the project.

Virginia is using student fees to help finance its stadium expansion, according to Keith Vanderbeek, the school's associate athletic director for business operations. He said $400,000 in fees is dedicated to debt retirement for each of the next 20 years.

For the 2001-2002 academic year, each full-time Virginia undergraduate paid $1,151 in student fees, $288 of which went to athletics, a $4-million windfall for the department. But fees were not increased to fund the stadium expansion, Vanderbeek says.

He estimates Virginia's annual debt service at $4.2 million to cover $60 million in 25-year bonds, plus a $12-million, five-year loan from the university.

The bonds and loan allowed Virginia to divert $50 million raised for the stadium into a money-market account, an investment that should be worth $187 million in 25 years, funds that will be used for stadium maintenance and the department's operating budget.

"I feel that it's going to top out eventually," architect Radecic says, "but I think it's going to run pretty strong for the next 7-10 years. I think by then we'll end up with a majority of Division I schools having replaced or renovated older facilities. At that point, those facilities should last 50 to 70 or 80 years, provided they're built with quality materials.

"Technology may influence the next phase. Who's to say what's going to happen 10 to 15 years from now? ... Will there be new technology that changes the way we watch and experience these games? I don't know that I see a lot of change in the buildings, but I can see a lot of renovations and a lot of technological improvements in the next 10-15 years."

Computers at every seat? Headsets with which to eavesdrop on coaches? No matter the innovation, colleges figure to ante up.

"But it doesn't have to be lavish or extravagant," Virginia Tech associate AD Dave Chambers warns. "You don't need a mansion to get the job done. If you're a coach and your livelihood is riding on success, if you're going to take a selfish attitude, the view would be spend, spend, spend. That mentality, I think, comes back and catches you.

"We really get too far away from our mission, and that's to educate young people, provide good experiences for them athletically, and allow our fans an opportunity to come back and participate in campus activities. When you take it to the Roman Empire mentality, that may ultimately be our history."